Labor’s deals stir dust-up in construction

Rigger John Franks and laborer Carlos Callejas of the ironworkers union were on the job at San Vincente Dam, where work for the San Diego County Water Authority is being completed under a project labor agreement.
— John Gibbins / Union-Tribune

Rigger John Franks and laborer Carlos Callejas of the ironworkers union were on the job at San Vincente Dam, where work for the San Diego County Water Authority is being completed under a project labor agreement.
— John Gibbins / Union-Tribune

Ironworkers prepared to bolt together two sections of a cofferdam last week before taking it to San Vicente Dam, which is being built under the San Diego County Water Authority’s project labor agreement. — John Gibbins / Union-Tribune

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Ironworkers prepared to bolt together two sections of a cofferdam last week before taking it to San Vicente Dam, which is being built under the San Diego County Water Authority’s project labor agreement.
— John Gibbins / Union-Tribune

Organized labor’s success in getting the San Diego Unified School District to grant union hiring preferences on $2.1 billion in construction projects last year has sparked a major counteroffensive from business interests that say it’s bad for taxpayers.

Contractors groups have pushed measures onto the June ballot in Oceanside and Chula Vista banning project labor agreements, or PLAs. Signatures are being gathered in San Diego as well. Both sides expect skirmishes will follow battle lines drawn nationally over the agreements.

“I am basically going to put my foot on the throat of the people pushing PLAs, and we are not going to let up until they finally cry ‘uncle’ or they are basically out of commission,” said Eric Christen, executive director of the Coalition for Fair Employment in Construction. The Poway-based nonprofit, formed by contractors, aims to ban the deals in 20 municipalities statewide by the end of the year.

Tom Lemmon, business manager of the San Diego County Building and Construction Trades Council, an umbrella group for 22 unions representing 35,000 workers, plans to keep pushing for more such deals. Lemmon was the lead negotiator on the San Diego Unified deal.

“What you might see is, as the ball starts moving, that things become easier for people to say, ‘Well, OK, it was difficult for San Diego Unified to get there; it won’t be so difficult for us,’ ” Lemmon said.

Whether unions or contractors gain the upper hand will have major implications in San Diego.

The city has several major projects on the horizon — the expansion of the San Diego Convention Center, a new downtown library, a new City Hall and a new football stadium — which would mean billions of dollars in construction work and thousands of jobs.

These types of agreements, which have been used since at least the 1930s, received a big boost last year when President Barack Obama signed an executive order to lift a ban on the agreements for federal projects.

Project labor agreements typically require contractors to hire workers through union halls. Nonunion workers may be required to pay a fee to unions to be processed for job referrals and may be forced to sign up for union health care and retirement plans.

Organized labor calls the agreements a way to ensure that projects are done on time and on budget by qualified local workers who are compensated fairly.

Opponents say the pacts as anti-competitive and discriminatory, adding that union preferences make it all but impossible for nonunion companies, who make up the bulk of the local construction industry, to do business. They argue that the deals lead to fewer bids and can increase project costs.

Under the agreements, contractors are generally required to commit to hiring a certain percentage of local residents. In San Diego Unified’s case, the target is 100 percent county workers, including 35 percent from high-poverty ZIP codes within the district.

The agreement covers all projects exceeding $1 million under Proposition S, the $2.1 billion bond measure.

Lemmon said that without the labor pacts, contractors are more likely to employ low-cost, low-skilled workers and not pay prevailing wages.

“I saw the problem,” he said. “That’s why, at the end of the day, project labor agreements are so valuable. It’s because you don’t get that sort of — I will just call that what it is — it’s cheating.”

Christen said that such contractors won’t survive in the free market.

“In the union view of things, the worker is the victim, the employer is an abuser and the product is crap,” Christen said. “I look around, and I go, ‘Where are these problems?’ ”

The use of project labor agreements in the public sector is widespread in Los Angeles County, the San Francisco Bay Area and some places on the East Coast, where unions have a stronghold.

In San Diego County, they have had limited reach. Besides San Diego Unified, the only other public agency with one is the San Diego County Water Authority, which adopted the deal in 1999. The agreement covers emergency water-storage projects, including the San Vicente Dam, now under construction in Lakeside.

Robert Homer, an administrator for the water authority, said the agreement provides assurances that there will be no strikes, lockouts or slowdowns.

Because dam construction requires concrete to be poured continuously, Homer said a work stoppage could mean the concrete won’t set right and the work would have to be re-done. Homer said the pact has worked out well but no study has been done to gauge its cost-effectiveness.

“We haven’t had any strikes, any lockouts. The unions have been able to supply a steady workforce to us. It’s really been without an issue,” he said.

How the San Diego Unified deal will work out is unclear; it has not put out any projects to bid under the agreement.

Some contractors have said they will pass on the district’s projects. Ken Bertalan, senior vice president of construction with Bergelectric Corp., which employs 600 electricians in the region, is one of those contractors.

The main reason, Bertalan said, is the requirement to hire most workers through union halls. Under San Diego Unified rules, contractors are allowed to retain only a certain number of core employees.

Bertalan is worried that his employees may be required to pay into union trust funds for health and retirement benefits, even though his company provides both. Contractors only can be exempted from paying into union trust funds if the district deems their benefits to be equivalent to what unions provide.

“They have made it so difficult to operate as a business, you would be nuts to sign it,” he said.

George Harris III, contracts compliance manager for San Diego Unified, said many contractors have shown an interest in bidding. The district has held workshops on the agreement, and more than 200 prospective bidders have attended.